they could. most people on both sides have a sense in the head of what the answer could be. the challenge is not simply about what happens in the elevated height of the negotiating chamber. the challenge of rises from the breakdown of trust and that is about what happens down the street in the daily experience of the people. >> good morning from the

national archives, between constitution and pennsylvania avenue, adjacent to the national. it holds three main documents that serve as the foundation for our country, the declaration of independence, the u.s. constitution, and bill of rights. it can also find a copy of the men in the carter and sen says data dating back to 1890. we are in the archives with

about 200 students as part of the close the program, a conversation with the secretary of education arne duncan. thank you for being here. let me begin with an "newsweek" cover story that said we have to fire the bad seed. how do you do that? guest: what we need to do it is support great teachers. an overwhelming number of teachers around the country do a fantastic job. i do not think we do enough to recognize and encourage them. were you have some teachers at the bottom who have to support, where they are not getting better, yes, we need to remove them. our students have only one chance to get a great education. host: we are going to get to student questions in a moment. generally, what is the role of

the department of vindication? guest: we think expectations for students have been far too low. we want to have college and career-ready standards for everyone. due to political pressure, i think standards have been dumbed down. we want to raise the bar. we want to see where we have schools improving. we want to make sure that we have a well-rounded curriculum one thing i am hearing is that they really narrowed the curriculum under no child left behind. allow kids to find their passion, find their skills. high bar for everyone, rewarding excellence. we want to become an engine of innovation. we have been a service-driven

bureaucracy for too long. we want to close the achievement gap. host: in terms of funding for schools, what percentage is it? guest: is pretty small, usually about 8%, 10%. we want to use those resources ito start dramatic change. we want to drive those dramatic reform that our country needs. we have lots of measures in which we need to get better. the president wants us to lead the world in 2020 in the rate of college graduates. we used to lead the world, but we have dropped back. we also have a dropout rate of 27%. we lose 1.2 million students a year. that is economically

unsustainable and morally unacceptable. we have to educate ourselves. the are not looking to incrementally get better, tinker around the edges. we are repaired to do something dramatic. we have to level the playing field to give you a chance to compete. if we do, your chance to do what you want is phenomenal. host: let's start with a question appeared. as always, we will be taking your questions as well. the phone numbers are on the screen. for all of you here, a show of hands, how many of you is this the first time to washington? thank you. caller: my name is kevin from nebraska. how does your education policy differ from no child left behind? guest: how many of the love no child left behind? host: i would tell you what i

think it did right and what it did wrong. i think what it did right was focusing on the achievement gap. focusing on the outcomes of the students. we need to continue to do that. there were a number of things that it got wrong it was very punitive. everyone was labeled a failure with little ways to succeed. it was very prescriptive. telling local schools what to do to get better. did actually lowered the bar, due to political reasons. that does you a great disservice. it also led to a narrowing of the curriculum we want to flip not on its head. we want people career ready. when there is a four-year university, two-year college, vocational school -- whenever it

is, we want to work toward that. we want to continue to see school districts grow and flourish. we want to make sure all of you have a well-rounded curriculum. host: question over here. caller: game from boise, idaho. how do we solve this challenge? guest: the president is asking for the largest increase -- while he is funding domestic spending, we are funding resources. a number budget is only 10% of most school district's budget. in most places, it's tough to the global budget. right now people are in a her in his position. schools should be open longer. some schools are going to a four-day weeks. i do not think that is right.

we have to think about education not as an expense but as an investment. even when times are tough, i do not see how we can cut back on spending for education. it is hard, brutal budget times at the local level, but if we do not invest in education, we will never get better. despite the tough times, we are challenging state and communities to make this a priority. i do not see anything more voluble than investing in your future. host: question in the back. guest: teachers who were under par under nclb could be admit -- is best. do you think under this program merit-pay should be part of it? guest: i think so. there are programs that have been set up that i think puts

teachers against each other. i do not think that is good. what you want is having people work together, and teamwork. when i ran the chicago public schools, we put together a performance-based plan. we put together 25 of the best teachers and we did a couple of things. we reward teachers and schools for getting better. we all mourn and everyone in the school, not just teachers. -- we reward the everyone in the school, not just teachers. you have to be thoughtful in how you do it and you have to be engaging with teachers. we have enough funding injured, to fund about 20 schools. we only went to the schools where teachers wanted us to come

to run the program and we had huge interest. host: compared to european nations, we are now ranked 10th or below in terms of graduate rate. when did we start to see this drop off? guest: it started about a decade ago. we used to lead the world. 40% of ou 32r 30 to 40-year-old had a college graduateducation. things have changed since then. all the political fighting that you see here in washington is not any good for you. we need to break through and education has to rise through. all of us have to work together.

so far there has been that spirit around education. what is encouraging to me is that nobody is saying that we are in a good enough position, defending the status quo and everyone knows we have to get better. so far, i have been very comforted by the support. host: teachers unions, how does this affect them? guest: i think the department of education has been part of the problems when it comes to unions. we have been this large, compliant-driven bureaucracy. we are going to push everyone outside of their comfort zone. teachers' unions, governors, all all of us have to be part of the example.

but we have to drive the kind of change and reform that we think we need. everybody loves to point fingers and blame each other. when we do that, high-school teachers blame middle school teachers, medical teachers blame the elementary, elementary teachers blame the parents. host: how many people work for the department of education, what is your budget? guest: we have about 4000 employees, our budget is about $3 billion. caller: what you think in the best education was one of the first thing is to be cut in the budget? guest because everyone could not vote. if every kid could go, and would

be better. having students step up and have your voice is heard it is very important. as a country, we have to remind me under invested in the country. i think teachers should be paid more, principles should be paid more. you need to have more after- school programs. as a country, we have not invested enough in education. having the student voices speak up could work. you have a leadership role to play. host: this is an obvious question, but what about role of parents? how has that changed? guest: they will always be a student's first teacher, that will never change. we have kids at home. we make sure we read to them every night.

i think we have to challenge parents. where there are not involved, publications could happen. parental accountability is huge. -- complications could happen. we have an audience full of teenagers. we used to survey teenagers and one of the most important things they would ask for it is more time. there is this perception that parentteenagers just want to be. they said that literally, one thing that they wanted more was more time with their parents.

host: and a question on this line of the room guest: christie from nebraska. what is your bonds on extracurricular music in the flooded programs after school? do you think that is quality or should schools focus on raising their great? guest: it is hugely important. whether it is banned, drummond, sports, academic decathlon on, those extracurricular as could not be more important in helping you stay interested and unique your interests and self-esteem. in our department, we used to do a lot of things. we tried to become world class in six things. we want to run a well-rounded education. we're putting an additional $100 million into that. we want to increase that to $1

billion to provide states and districts a chance to give you a world-class education. we are serious about this from the outbreak. -- dropout rate. caller: noah sullivan, nebraska. the most heavily funded high school and is right here in d.c. @@@@@@b ))á,g

the right thing for our country. to your point, we have to make sure every dollar we are spending is well spent. if we are perpetuating academic failure, we have to challenge that. host: good morning from the national archives. this is a special edition of "washington journal." are in a conversationh states. arne duncan, the secretary of the department of education, was previously a part of the chicago education system. next guest. beth in maryland. good morning. how about a question from over

here? caller: laura from nebraska. i know most teenagers in high school will say that being called homosexual or transsexual is the worst insult. the average high school students will hear 26 territory gay slurs and during the school day. what are your feelings about this and how do you plan on stopping gay bashing in school? guest: i hate any type of intelligence -- intolerance. we need to teach people to have respect for diversity. we are going to work as hard as we can to make sure that we are creating schools where kids can feel safe, emotionally, physically, where students are respected.

in is very hard to be successful academically with that type of behavior. we need to promote safety so that kids can focus on school work. wherever we see that kind of intolerance or discrimination or hate, we need to challenge to fight the climate. host: how do you do that? guest: i think you have programs that bill walk students and teachers through these climates, giving them a chance to talk about their differences. you have diversity clubs, voices in government, where students are providing a huge amount of the hard work to make sure that there is a positive culture in their school. student voice is huge. i do not think we value and not how much our young people have to contribute. i think students can do so much

by creating more positive peer pressure, by reinforcing good behavior. and we need to do a better job of tapping into your capacity and skill. host: margaret is on the line from north carolina. caller: good morning. with the account left behind, so many of our teachers struggle to pass our kids. would this new bill of teachers to go back into teaching, rather than teaching a test? guest: thank you. that is a constant complaint that i heard. we wanted to have a well-rounded education. reading and math were important.

science and social studies are as well. is a little education, art, drama. all those things gives us a chance to be successful bid to two other changes that we want to make to support teachers in a better way is investing $4 billion in teachers. we need better professionals, better mentoring programs. they need more time to collaborate. we are making an historic investment there. the other thing about nclb, for example, if you were in sixth grade teacher and i came to you as a third grader three grades behind, and i left her classroom leadiving one great behind, i would still be labeled as a failure. not only what i consider that cater to be not a bad teacher, but a good teacher.

in one year, and they accomplished two years of progress. what we should be doing is rewarding that type of teacher. we want to look at growth, how much states, districts are gaining to a higher goal. a well-rounded education is usually better. we think more time for mentoring, collaboration with teachers will help. teachers are not scared of accountability. no one is. they want to be fair. host: on that issue of being well-rounded, when a school is faced with budget cuts, often it is the arts, music programs, sports, that are cut. guest: i do not have any easy answer. i have been there. when budgets are tight, you

really have to reflect our priorities. when we do not value those extracurricular, i think the students pay a price. but if you do not raise your math scores -- guess what? music has a huge influence on math scores host. callerhost: how many of you participate in dexter corp. -- extracurricular activities? how many have seen cuts in your school or school district? guest: that scares me. i love the but dissipation. this is a highly motivated group of students. -- i love the participation. when we start to narrow down the school day, i start to get worried. guest: in north carolina, saw carolina, and texas, and they

have been talking about their history books. mom was wondering why and what is wrong with them? i was wondering if this would become a national issue? guest: curriculum should always be done at the local level. what we are working on is -- leadership is not coming from us, but from the states. the education leaders working on these higher standards. if you have a high bar, then local folks can work to get to that hire bar and figure on who is doing a good job, but we are not going to have some sort of a national curriculum. if we have high standards and good assessment behind it, we will see improvement. guest: make rodriquez from wilmington, north carolina. callerin some schools, there art

of illegal immigrants. how do you feel about educating illegal immigrants? guest: i think we need to educate every child in the country. not educating someone because of their parent prostatitis, i do not agree with that. -- parent's status, i do not agree with that. we have to give every child an opportunity of a free education. host: next phone call. caller: innovation has always held to this country to be great. with all of the bosses and buildings, etc., why have not been taken the internet more for our education? guest: i think you are starting to see that.

we want to invest heavily in innovation. we have a $600 million fund that we're going to compete out two different districts -- to different districts. how many of you have cell phones? how many of you spend a bit of time on them? host: everyone is awake now. guest: we could maybe think about educating through those. why do we have to only educate for these eight hours a day? we want to make an unprecedented investment and use technology to better teach students. host: jacqueline from tempe, arizona. welcome. caller: good morning. my question is for a school on this reservation in arizona.

traditionally, native american students are the lowest performing in the country. how do you plan to address the severe problem with the school system? host: before he responds, can you give us a sense of the number of students on the reservation, some of the issues you are dealing with? caller: we have 350 native american students preschool through fifth grade. the issues in the communities, traditionally, students have the highest dropout rate, highest suicide rate, severe social issues, because of the integration problems historic way that we have had with reservations. that has trickled down to the school environment. traditionally, they are a federally funded school.

currently, only a portion of what they need is being funded through congress. we are challenged severely with financial constraints. how do we raise the achievement of native american students who have been historically underfunded? guest: thank you not only for your question but for your commitment to these children i have had the chance to visit 37 states these past few years. phenomenal schools. one that i will never forget it is visiting a school in montana, northern cheyenne. i thought i knew what part of my, coming from chicago. in that reservation, there is 70% unemployment.

the high school i went to have one student in six years go to college. staggering. these were great students. 9 keep in touch with one of the young man who is there. that lack of opportunity is devastating. these are tough issues. i asked, what can we do to help? there is huge teacher turnover. one thing we want to do is put resources behind teachers and principals who want to serve in underserved communities. you have to have some sort of stability in those places for students to be successful. technology. that can be a huge opportunity here. if you cannot offer an ap class at that location, one not take it online? they want to be challenged. we have a huge challenge with

schools in the indian countries. we're working closely with the bureau of indian affairs, the garment of the interior, and we have to give these children a much better education if we want to reduce those unemployment rates. host: joshua from dream bill -- from greenville, north carolina. can you tell us what the dream act is? guest: it would basically allows students who may not have the immigration status in place the chance to go to college and receive financial aid, just like you would. . .

am in washington i know that they do not. part of what we want to do is to reauthorize no job left behind and to give a lot more -- no child left behind and give a lot more flexibility in this country. do you know how many schools are in this country? take a guess. host: you have at -- you have the microphone. how many do you think we have? >> balad. guest: -- >> balaa lot. [laughter] guest: safe guess. we have about 100,000 schools in this country. we want the innovation and

flexibility of the local community. host: if you could change one thing about your school, what would it be in terms of documents or the way the school was run? could someone wants to answer that question -- if someone wants to answer that question. but we will go to your question next. >> de believe the standards of the standardized tests should be raised or lowered? guest: they should not be lowered and they should absolutely be raised. when we dummy down students -- the state arms from did that, they lowered standards. -- the state i am from did that. they lowered standards. if you're told at fifth or sixth grade your "meeting a state standard" the logical assumption

is that you're doing ok. when in fact, in many places those standards have been dummied down so much that those students are barely able to graduate from high school and totally and adequately prepared -- totally and inadequately prepared for college. these are your strengths, these are your weaknesses, this is what we have to work hard to be successful together. what bothers me is students that work hard and get to be juniors or seniors and then find how far behind they really are. we have to raise standards. host: janet is joining us from indiana, good morning to you. caller: right now we're in big trouble with standardized testing. those tests become so important that people are cheating in order to maintain their schools.

before standardized testing, it was like the s.a.t. at the end of the year and these kids went to college. you are taking so much away from the classroom with a standardized testing because all they do is the standardized testing. these kids miss out on so much imagination and flexibility for the teachers who are getting so frustrated about everything because it all focuses on standardized testing. guest: i just continue to say this, that everyone there -- every child having a well- rounded curriculum is so important. we have to get back to well- rounded education. host: if you could change one thing about your school, you

raised your hand. what would you change? >> i am from nebraska and i would change things like the fine arts because we got our little theater taken away to make a fitness center for the sports people. now we have to go to the elementary on their little stage, i guess. nafta your presentations up there. i would change that. guest: the fine arts are acute importance. the sports are a few -- huge importance. they should not be competing with each other. if we look at the average high school around the country, basically, every four seats, somebody would be dropping out. and in many places it is actually one out of two. i would like to ask students what we can do collectively to reduce the dropout rate. what can we do collectively

nationally, the local level, the school level to drop -- reduce the dropout rate to the -- to zero. host: you want to inject question? >> no, i have another question. host: let's stay with this. let's move on to you. >> change the dropout rate? i do not know, atry to instill s much as you can't as early as possible. try to instill a fervor of -- try to instill as much as you can as early as possible. try to drive a fervor and a love of learning. i do not know how you do that, but i guess it starts with the parents and teachers. host: keeps going back to the parents. guest: parents are hugely important. great teachers are hugely important. i think we ought to make sure that every child has an adult in

their lives helping them through good times and bad. when i was growing up i had to great parents. not every child is that lucky. -- i had two great parents. not every child is that lucky. we have to make sure that there's someone from the community, a church member, a coach, someone to step up and be a positive influence in that child's life. caller: i have a question that i'm sure the students in the audience are when to kill me for. i'm 44 years old and i'm going to school to be a teacher. i am also a mother. during my time in the classroom i have noticed that from 8:00 a.m. to 2:00 p.m., that is not a lot of time. i was thinking that if you could extend the school time to make its so that teachers have more time, because it seems like they

have specials and then they ought to go to lunch -- half to go to lunch. host: will ask them. how many would prefer to go to school longer during the day? it just a handful. how many say it is just about right? ok, everybody. caller: i also have a question about teachers that cannot be fired because of their tenure. they probably should not be there anymore because they do not want to be there. how many students feel like the teachers do not care about them at that point? host: interesting. guest: we're going to need about 1 million new teachers over the next four, five, eight years. the baby boom generation is moving toward retirement. i think all of you have had

extraordinary teachers. i have that one teacher, my high school english teacher that pushed me to do things i did not think where possible. i think we have to do a much better job of rewarding the excellence of some money teachers and -- so many teachers that are working 10, 12, 14 hour days, at home preparing. we need to reward excellence and deal much more honestly where it is not working. >> peter torrey, san francisco, california. you mentioned a good test scores come with good education and confidence, but for certain students the confidence is just not there and test taking is difficult. if i were to change one thing

about my school, it would be to administer a standardized testing strategy class for the sophomores and juniors. guest: that is a very good idea. that kind of stuff can be learned, frankly, fairly easily. the hard part would be content. helping you with the test taking skills should be a minor part. you spend all your time running out to take tests. that is not for the where you need to have the knowledge. host: i want you to be honest about this next -- next question. are you embarrassed to raise your hand, ask a question of the teacher, or are you the kind of person that asks questions all the time and says, i do not know what this is about? >> i will ask questions, but i find myself on the test more confused and nervous than during class. host: how many of you are afraid to ask your teacher for a

follow-up? you do not understand something and you just sit there quietly. be honest. hands are still going up. guest: it is hard to make yourself vulnerable. it is hard if you feel the teacher does not really care passionately about you. but again, most fans stayed down, which says that a lot of folks -- most hands stayed down, which said a lot of folks here have good teachers. >> earlier, you were talking about the college graduates and how we are not rising with the other countries. i was wondering, why did you think cutting budgets in higher education schools is necessary if they will just take away scholarships and make it harder for people who cannot afford college to go? guest: i'm glad you brought that up. going to college has never been more important and it has never been more expensive and our nation's families have never been under more financial the rest.

-- financial dresseduress. >cñc÷opart of the health care bl that is around higher educationñ will allow us to put an additional $36 billion into y]programs to make college more affordable over the next -- into pell grants to make college more affordable over the next decade. this is a great lesson in politics for you. we're going to put about $60 billion into higher education, to increase pell grants, money to reduce your payments once you graduate for -- from college. all of this is because we're trying to simply stop subsidizing banks who have been making loans to you and put that money into education. it seems like the right thing to do. and but this has been a huge debate. the banks have had a big -- a

good deal for a long time, spend millions of dollars to hire lobbyists, run ads in many states. families like yours do not have lobbyists. families like yours cannot hire advertising firms to put together television ads. i think it is the right thing to do. how many times do you have a chance to invest $60 billion in education without going back to taxpayers? it is a phenomenal, breathtaking opportunity. i'm very hopeful that it will pass the senate this week and become law and make college much more affordable for you and your brothers and sisters. host: how well do you know the president? guest: known him for 15, 16 years may be. host: how is he on the basketball court? guest: the template. a very good competitor, placed to win. a good defender. and likes to get to the basket and scored.

host: whose scores more points, or the president? guest: we both do ok. [laughter] host: going to chuck in boston. caller: so many things have been said that my initial thought is secondary now because the secretary had on something -- hit on something. these kids seem to be more advanced than my original thought. it seems now that schools take care of the advanced students and it seems like the rest of the group -- which is maybe 10%, and the rest of the group is thrown into one. it did not used to be that way. self-esteem was reality and not every kid can be an honor student. sometimes parents put too much pressure on children. sorry to refer to you as kids. it is like the soccer parents that pushes the kid

athletically. they want the kid to do too well. there is a happy medium where a student might be better off at a technical school, might be better off -- you know what i am saying. you do not all have to be advanced students. host: chuck, we will get a response. thank you. guest: it is a great point. what every student has to do @ #rbrbirbrb

question, the news of the day -- there is a front-page story in the chicago sun-times and the chicago tribune about a list that you came up with to help city officials make sure that they went -- that their students went to the beat schools. guest: that is not correct. we actually try to do was make this available to everybody. -- we actually tried to make this available to everybody. when you run a large school system of 400,000 students, when they go to the dry cleaners, you get questions. when you go to the zoo, you get questions. you just want to be responsive. you try to get people and answer, yes, no, whenever it is. host: no special treatment?

guest: 0. just trying to be responsive, making sure that everybody could have an answer. host: last question right over here. >> so often, policies focus on the kids that cannot keep up. but what about the kids that have outgrown the curriculum? guest: we think that ap glasses, international baccalaureate, dual enrollment, taking junior college courses as a junior or senior is a big deal. we are investing dollars to make sure that students have more of those opportunities. raising expectations in the classroom is hugely important. and all of those opportunities, we cannot do more of -- enough of those. just give me a show of hands, how many of you here can give --

can take a college level class if you want? i love that. i want to make sure that every child in this country as those kinds of opportunities. host: as a follow-up, what advice would you give the secretary on your point? >> i think the school needs to look at the kids a little more closely. maybe they're cheating, but they stop and get bored, kind of as i have done. the class can only move as fast as those person. i think the government needs to look at more options to keep the kids in school because dropping out when your board is a big issue. guest: it is a big issue. we are trying to invest $100 million to invest in high school kids taking college level courses. host: the you learn anything today? guest: i am inspired. i think we as adults have to do a better job of helping you fulfill your potential.

our students are smart, passionate, committed. they do not want to just be successful themselves. they want to help their peers and create opportunities. i think if more adults understood your passion and how serious you work, we would invest more in education. the more your voice is heard, that is a good thing. i want to thank you for taking education so seriously.

mr. baucus: that would be my intention. the presiding officer: without objection. mr. baucus: madam president, this morning president obama signed a law that will guarantee meaningful insurance reform, like coverage for people with preexisting conditions. he signed comprehensive health care reform into law. many of us have dreamed of that day for years. now it is a fact. now it is law. now it is history. indeed, it's historic. he signed a law that will insure that average people without insurance will get health insurance choices just like members of congress. this morning president obama signed a law that will control the growth of health care costs

in years to come. today we have before us a bill to approve the new law. we do not have before us the whole health care reform bill. we do not have to reopen every argument that we had over the last two years. we do not have to say everything that we said about health care one more time. rather, we have a bill before us, a bill that will do a few good things. we have before us a bill that will improve affordability by increasing tax credits to help pay for insurance premiums, increase those tax credits. we have before us a bill that will help with out-of-pocket costs for lower- and middle-income families. that is raise it. that is raise the assistance. we have before us a bill that will increase aid to states to help them shoulder the costs of covering americans under medicaid. we have before us a bill that will give additional help to

states, that took extra steps to cover the uninsured before foreman took place. these -- before reform took place. we have before us a bill that will make sure that no state is singled out for special treatment. we have before us a bill that will completely close the doughnut hole -- that is the coverage gap -- for medicare prescription drug coverage. that's closed by the end of the budget window. we have before us a bill that will start with a $250 increase in federal assistance toward coverage of the doughnut hole right away -- this year, 2010. we have before us a bill that will fight fraud, fight waste and abuse in medicare and medicaid. that's the bill we have before us today. this is not the whole health

care reform bill. this is a set of commonsense improvements to that new law signed by the president earlier today. i do not expect opponents of the bill to talk about these commonsense improvements. frankly, it's pretty difficult to understand why senators would want to oppose these commonsense improvements. rather, if this debate is anything like the debate so far, opponents of this bill will try to change the subject. when people look at what health reform really does, they're more likely to support it. when they separate truth from fiction, separate the wheat from the chaff. so i suspect opponents of this bill will try to distract observers from what's really going on. rather than talk about commonsense improvements to this bill, opponents will talk about

the process. over the two years that we have been working on health care reform, there have been many on the other side who have sought to make the debate about process, not about what's in the bill, what improves people's lives; but about the process, the legislative process. they have sought to emphasize how messy the legislative process is, and sometimes it is a bit messy, and of course criticizing how congress works is a heck of a lot easier than improving health care for the american people. many opponents of health care reform are obsessed with process and procedure. i am much more focused on the people whom health care reform will help. i'm focused on people like pat and her late husband, dan, from lincoln county in the northwestern corner of montana. pat and dan used to have a ranch in southwestern lincoln county. dan was the fourth generation of

his family to run the ranch. he grew up on the ranch, and he worked very hard every day of his life. in 2000, the doctors told dan that he had hodgkin's lymphoma, but pat and dan did not have health insurance. dan never took a handout, and pat and dan thought that they could handle their bills on their own. that's the way they always lived. it's the way a lot of people, i dare say most people live. but then the medical bills started piling up. swallowing his pride, dan made what he called the hardest decision of his life. he filed for medicaid. the state told him that the only way they could be eligible for medicaid was to put a lien on the ranch. as dan's medical bills piled out of control, pat and dan were forced to sell their land. pat said that the cancer ravaged her husband's body, but selling

their ranch to pay for medical costs broke his spirit. that's why we need to enact health care reform. most bankruptcies in america these days are related to medical costs. just think of that. most bankruptcies in america today are related to medical costs. no one in america should have to sell everything that they have no one should have to go bankrupt to pay medical bills. i'm not going to let the opponents charge us about -- the idea that health care reform has been some sort of rushed job is a myth. it's a myth that deserves busting. the facts are that the finance committee and the "help" committee each went through a full and transparent process to consider health care reform legislation. by that, i mean fully open, totally open to the public at all points.

this has been the fullest an most transparent process for any piece of legislation in memory. i might say, madam president, a journalist once approached me about a year ago and said, senator, you're starting a -- are you starting a new trend here with openness an transparency, putting all of the amendments up on the web, is that a new approach that the senate's going to pursue from now on? i said, i don't know, but i think it's right thing to do. from the start i wanted to develop a bipartisan consensus package. i wanted to work together. if someone gets ill or cancer, you're not a member of one party or another. it's personal. we've got to work together because that's what the american public want. that's what i tried so hard to do. i want a bill that would brought political support across the political spectrum there is a long tradition in the republican party. that tradition stretches back to

theodore roosevelt. to richard nixon, to bob dole and to john j.a.v.e.e. i believe what we have set out to do and what we have done fits comfortably in at it digs of what -- in at it digs of what those republican leaders sought to do. on may 6, 2008, we held our first hearing on health care reform. in fact, the finance committee held a hearing in 2008 alone. we held those hearings to help the senators come to a commonsense understranding of the health care crisis. help to explain why we're in such a crisis. what needs to be done. how the various parts of our health care system works and how various parts don't work. i held it from a point of view to educate all of us in the committee to get us ready for

2009, a year where it was clear that this congress would work hard and pass health care reform. we sought in the middle of the klass congress to lay the groundwork for passing a bill in this congress. on june 16, 2008, nearly two years ago, senator grassley and i, my good friend and ranking member of the committee, convened a bipartisan health care reform summit in the congress. we called it prepare for launch, health care reform summit of 2008. chairman ben bernanke was there, other notables were there a full day of conference, members of the finance committee, both day of conference, members of the finance committee, both sides of the@@@@@@@@

on november 12, 2008, this senator released an 89-page blueprint for health care reform. i have it right here. we named it, call to action, health care reform 2009. it was a comprehensive framework for health care reform. we posted that blueprint on the internet for all to read. the ideas in that white paper reflected a broad consensus of thinking among health care experts p we searched far and wide, what's the best thinking. what do other countries do? looking at what other countries do, we wanted to look at what america can do. we're america, we're not canada, great britain, we're america. we spent $2.5 trillion in health

care in america with public medicaid, medicare, and the children's health insurance and the commercial health insurance. i want to maintain that same balance with the uniquely american solution that reflected this white paper. the ideas of that white paper remain the foundations of health care reform that became law this morning. now, that's a strong statement to make, but it's true. almost all the ideas that all committees on both sides of the congress have enacted and are in the bill that the president signed today. now, of course, there are changes here and there. but the basic foundation in that white paper -- this white paper right here was put together november 2008, remain the foundation of health care reform that became law this morning. the ideas behind our health care reform legislation have been available for all senators and the public to consider for more than 16 months. "the washington post" called our

white paper, and i quote -- "striking in both its timing and scope." "the washington post" said -- quote -- "rarely, if ever, has a lawmaker with his clout moved to early eight days after the election of a president to press for such an enormous undertaking." in april and may last year senator grassley and i released health care reform policy papers on three major areas of reform. what are they? first delivery system reform. second insurance coverage. and, third, options for financing. once again, we made these papers public and posted them on the finance committee's website. senator grassley and i convened three open, televised bipartisan round ittable discussions with experts on those subjects. we held several day-long meetings with finance senator to discuss the topics of those

papers. on april 30, 2009 "the new york times" reported -- quote -- "in setting forth detailed policy option, and inviting public comment, mr. baucus and mr. grassley set a precedent for openness. "scption on may 18, 2009, the newspaper ploit ploit said that the freak reports included discussions about keeping peace in the delicate alliance of republicans democrats, industry, labor, physicians and consumer advocates. from the outset i worked hard to keep the groups talking to each other. that was coming back from the 1990's when health care reform fell apart when the groups opposed the bill. by the groups, i mean consumer groups, i mean hospitals, labor, medical advice manufacturers, nursing homes. all the groups.

i kawd up their c.e.o.'s, kept talking to them constantly. what do you think? a problem here, make an adjustment there. stay at the table. don't walk away from the stable. suspend judgment if only for five minutes, for everybody's best interest and america's best interest if this passed. i had 142 meetings to discuss health care reform with senators on both sides of the aisle. in all those meetings added up to more than 150 hours of discussions. i tried to work out a bipartisan package in the finance committee. i started, as i always do with the ranking republican member in the finance committee, my good friend, chuck grassley. and since the finance committee and the "help" committee share a jurisdiction over health care, senator grassley and i agreed that we wanted to include the ranking member of the republican committee, mike enzi, and our

colleague jeff bingaman. as well we reached out to the chairman of the budget committee, senator conrad and the ranking republican member of the committee, senator snowe, both members of the finance committee. both senators conrad and snowe have a long history of working across the aisle to reach consensus. we also reached out to senator kennedy, chairman of the "help" committee, meetings with him and all of the chairmen and ranking members together, with senator kennedy, how gracious he was and trying to work together. he wasn't trying to do this for ted kennedy. he was trying to do it for people who needed health care. it was very, very touching. we had six groups -- a group of six senators, three democrats and three republicans. we worked hard, rolled up our sleeves and met 31 times for 63 hours over the course of four months. many have said that we met too

long. many said that i should have broken off my discussions with my colleagues. but i wanted to go the extra mile. i wanted to try. i wanted to bend over backwards. i wanted to do everything i could to reach a bipartisan consensus. why? because that's right thing to do. that group of six senators came very close to an agreement. we did not end up in -- or reach an agreement among all six of us, but i took the product of those bipartisan discussions, our areas of tentative discussions, our areas of tentative agreement and made them the starting point for our committee mark yuvment that is, the group of -- markup. that is, the group of six helped forge through immense hours of discussions major improvements on our thinking. we corn vertd that product into -- converted that product into a committee mark. i made it public and posted it online on the committee's

website on september 16, 2009. that was four days longer than the committee rules required. for the first time in history on seapt 19, the finance committee posted online every amendment submitted to the clerk. we posted the full text of all 564 amendments. members of the committee and the public had three days to review the amendments and prepare for markup. our finance committee markup stretched over eight days, fully public. worked well past 10:00 p.m. on most of those days. the markup was the longest that the finance committee conducted on any bill in 22 years. prior to the markup, i accepted 122 amendments as part after modified chairman's mark. 26 of those amendments incorporated into the markup came from republican colleagues. during the markup, the committee considered 135 amendments.

committee accepted 41 amendments and rejected 55. on october 2, 2209, a full 11 days prior to the committee vote on the bill, i posted online the mark as amended. and on october 13, 2009, the finance committee ordered the bill reported, the bipartisan vote of 14-9. the majority leader then melded the finance committee and "help" committee work products into a single bill. the majority leader proceeded to move to the bill on november 19 of last year. we had a full and open debate of the bill on the senate floor. on december 24, christmas eve, more than a month later, the senate finally passed health care reform. now, i have taken some time to detail the long legislative history of this effort. and i did so because i believe any fair observer of this legislative history would draw three conclusions.

one, we tried mightily to work with our republican colleagues to reach a broad consensus bill. we went the extra might we bent over backwards. and for a variety of reasons, our republican colleagues simply did not want to be part in the end of this effort. two, nobody rushed this bill. this has been a full and deliberative process. about two years. there is no way the health care reform was -- quote --"rammed through the congress." no way. not true. three, we conduct add process more open than that for any other piece of legislation in the modern senate. but opponents of the bill have tried to raise as many charges as they can. they are tried to throw as much mud at this effort as they can hoping that something sticks. their latest attack has been to criticize the use of the budget

reconciliation process for the bill before us today. some have charged that using reconciliation is somehow unusual. they argue that using budget reconciliation for health care is somehow unheard of. and they argue that we never use reconciliation for major matters. nothing thereto, could be further from the truth. is reconciliation unusual? the answer is clearly no. budget reconciliation is a pretty common process here in congress. since congress began using the budget reconciliation process in 1980, some 30 years ago, congress has passed some 23 reconciliation bills. 23 in the last 30 years. as most years have seen reconciliation bills. it is an exceptional year when congress does not pass a reconciliation bill. now what about health care?

is health care something insurance for reconciliation? once again, the answer is no. the nonpartisan congressional research service did a survey of the 22 reconciliation bills that made it through congress to the president's desk. of those 22 reconciliation bills, c.r.s., congressional research service, identified 12 of them with titles or other major legislative components pertaining to medicare or medicaid programs. in other words, most reconciliation bills have addressed health care. once again, it is the exceptional case where a reconciliation bill does not contain health care matters. now, what about major health care legislation? is major health care legislation in reconciliation unusual? once again, the answer is no. c.r.s. counted the number of pages in the law books on health care that the reconciliation process has put there.

it is not a small number. c.r.s. found that bills enacted using the reconciliation process contributed some 1,366 pages on health care to the statutes at large. c.r.s. found that the average reconciliation bill with health care in it contributed some 124 pages to the statutes at large. pages in the statutes at large have more words than bills do, mr. president, so these pages reflect far more pages in bill text. let's consider some of the major changes to health care that congress has enacted in the last 30 years. well, there is cobra. the health insurance program for people who lose their jobs. congress enacted the cobra health insurance program as part of a reconciliation bill. now, cobra stands for the consolidated omnibus budget reconciliation act. reconciliation. a republican-controlled senate

passed the cobra health insurance program as part of reconciliation in 1986. since then, three later reconciliation bills have amended the cobra continuation coverage rules. congress changed cobra in reconciliation bills in the years 1989, 1990, and again in 1993. another one of the largest health care expansions that congress enacted in the last 30 years was the children's health insurance program otherwise known as chip. once again, we enacted it -- you got it right -- in reconciliation. congress enacted chip as part of the balanced budget act of 1997. once again, it was a republican-controlled senate that passed the children's health insurance program as part of reconciliation in 1997. then there is the medicare advantage program, medicare

advantage or medicare plus choice as they called it then was a major change in software, introducing private insurance companies into the system. once again, the republican-controlled senate passed that in reconciliation in 1997. so it's hard to think of a major health insurance expansion that does not involve reconciliation. sure, there were some, but it is does not involve reconciliation. sure, there were some, but it is the exceptional case where@@@@@

budget process this way? it's simple. congress created the budget process so that congress could make fiscal policy with a simple majority vote. the congress that created reconciliation wanted to ensure that future congresses could vote budget matters up or down, yes or no. now, is it unusual for anything this large to have been passed in reconciliation? once again, the answer is no. in terms of dollars and cents, the biggest reconciliation bill by far was the 2001 bush tax cuts. the 2001 reconciliation bill worsened the deficit by more than $550 billion over the first five years. that was the reconciliation

bill. not far behind was the 2003 bush tax cut. that reconciliation bill worsened the deficit by more than $430 billion over the first five years. in terms of policy changes, it's hard to match the two bush tax cuts. but another measure that came close was the 1996 welfare reform bill. once again, that was a reconciliation bill. the 1996 welfare reform bill was the most sweeping revision of poverty programs since the great society. once again, that reconciliation bill was passed by the republican-controlled senate. it's hard to say that we have not done big things in reconciliation. in sum, it's not as though we snuck health care reform through the senate. we passed it with an exhaustive, open process, and the senate passed health care reform with a supermajority. we passed it with 60 votes.

now, all that remains to be done to complete health care reform is an up-or-down vote on this final bill. this last step in health care reform deserves to have a simple majority vote. that's all that needs to be done to finish the job of reforming health care reform. and let me return to what this bill would do. this bill would help to make health care more affordable for people who don't have it and improve upon the senate bill which the president signed this morning. we do it for people like car men men -- carmen and her daughter marilee from paulson, montana. carmen had insurance, but she still had problems with coverage and costs. before march, 2008, carmen had insurance with a $5,000 deductible. she found herself avoiding care because of the high deductible. she and her daughter marilee

waited until they knew that they needed help before they went to a doctor. certainly with a deductible that high, 5,000 bucks. at one point, carmen's daughter contracted aure nary tract infection. wanting to avoid the high deductible, carmen and her daughter decided to wait a day and see how it would go. but her daughter did not get better. she needed to get care. since it was saturday, there was no urgent care open for 50 miles. the only option was to go to the emergency room. the hospital billed carmen for $500 but her insurance company refused to pay it. carmen appealed, asking them to pay the $70 insurance would normally pay for urgent care and carmen would pay the remaining balance, but the insurance company still denied her claim. when carmen broke her fingers, her insurance company refused to pay for treatment. the insurance company paid only for x-rays even though carmen was entitled to $650 coverage

for accidents. carmen paid for her own treatment but she gave up on the therapy because it cost too much. carmen's fingers will never fully heal. in march, 2008, carmen switched to another insurance company and lowered her deductible to to $2,500. remember, the last policy had a deductible of $5,000. the last month, carmen received notice that her premiums would go up by about 32%. carmen will have to keep her premiums down by decreasing her coverage. it's a strategy that she has been using for years. we fight for health care for people like carmen and marilee. we fight for health care for people like erin and william redlock. erin lost her father william because their insurance company

denied and delayed his bone marrow transplant until it was too late. william taught school for more than 30 years. he thought he had a good insurance through his retirement package. the doctors told william that he had leukemia, but the doctors were able to treat it with oral chemotherapy for a long time. in 2002, the doctors determined that william would need more advanced chemotherapy. keep him on chemotherapy as long as they could. then the doctors determined he would need a bone marrow transplant. the insurance company paid for all of the preparations, testing and treatment leading up to the transplant, but the insurance company denied the procedure itself. mr. president, i note that my -- i'm at the end of my half-hour here. let me just say that -- i conclude here by noting that this is why we fight for people. this is why this health care bill is here before us. people like carmen, marilee,

pat, and many people across this country deserve much better. we're at the very end here. we're about ready to pass this legislation. the president signed the bill this morning. this is just to make it even a little bit better. it's a normal process, open process. i urge all my colleagues to quickly pass this so we can help a lot of people and get on to other matters, and i thank the chair. mr. gregg: mr. psint? the presiding officer: the senator from new hampshire. mr. gregg: i wish i could stand here and agree with the senator from montana. i wish that as i looked at these bills that have just passed the house and now that we're getting the trailer bill, the bill that was used to purchase the votes in the house and pass the big bill that i could say that america's children are going to be better off, that the people who have health care issues in this country are going to be better off, but that's impossible to say. why is it impossible to say? because this bill as it passed the house was an atrocity. it was an explosion of

government the likes of which we have never seen in this country before. it grows the government by by $2.6 trillion. in the process, it will interfere with almost every american who has private health insurance and how they get their insurance. and it will take americans who have health insurance today and it will push them out of that health insurance as the small employers across this country decide that they can no longer afford it. and it will say to medicare recipients we're going to cut your medicare by a trillion dollars when this is fully implemented, a trillion dollars, and we're going to take that money and we're going to use it to fund a brand-new entitlement over here for people who aren't on medicare, who aren't seniors, and we're going to use it to expand other entitlements for people who aren't on medicare and who aren't seniors, and then the medicare recipients who have seen their program reduced by a trillion dollars are going to be

left with a program that remains on a path to insolvency, a path which will inevitably lead to lesser quality of care for people who get medicare because providers will find themselves forced out of the system. and people who are on medicare advantage will virtually find that that insurance plan is eliminated. so this bill has a lot of major problems, the big bill that passed the house, and now we get this trailer bill, this buy-it bill which was used for the purposes of getting votes in the house. and this bill aggravates the fundamental problems of the bigger bill that the president signed today. this bill adds more costs, creates more taxes and will reduce medicare viability in a more significant way, and yet

it's called good policy. very hard to understand that. when you look at these bills as a combination, especially when you put it in a con text that thrown on this train was the nationalization of the student loan program where 19 million students today are going to be forced into the process of getting their loans through the federal government instead of through their local banks or community banks. and when you look at this in that context, what this bill is really about -- and the president has been very forthright about this -- is a massive explosion in the size of the government. growing the government for one fundamental purpose because this administration believes that a bigger government creates prosperity. well, we don't believe that on our side of the aisle. we believe that there is a lot of good things that could have been done to make health care better. i have offered a proposal to do that. other senators, senator barrasso has a proposal to do that.

they would have all addressed the health insurance issues of making sure that everybody could get coverage if you have a pre-existing condition. all these straw doings that are being thrown up is the -- as the reasons why this bill would have to be passed, they would have all had to be taken care of if a more reasonable bill had been passed, but what wouldn't have happened, there wouldn't have been this massive explosion in the size of the federal government which we will inevitably pass on to our children, a government they cannot afford. under this bill, the costs to the federal government, which has tara dishly been about 20% of our -- what has traditionally been about 20% of our gross national product will jump up to about 25% of our gross national product. it will be unaffordable as a result of that. but they claim they pay for it, and the way they claim they pay for it primarily is to cut medicare by a trillion dollars when fully implemented.

now, this seems fundamentally unfair to the people on our side of the aisle. we all recognize that medicare has serious problems. it's got a $38 trillion -- or or $36 trillion unfunded liability. we all recognize that medicare recipients depend on that program. and so if we're going to adjust medicare payments, cut them, as they do in this bill, eliminate programs like medicare advanta advantage, for all intents and purposes, then those savings as a matter of fairness, should stay in the medicare system. i mean, that's what should happen. those savings, which are huge in this bill. and i respect the fact that my colleagues on the other side of the aisle stepped up and made this massive attempt to cut medicare. i mean, that was quite a decision on their part. but what they did was they took those savings, which should have gone to giving senior citizens a stronger and more vibrant

program, and they took them and they started brand-new programs, brand-new entitlements programs, neither of which have anything to do with medicare or senior citizens. so essentially they're funding this program in large part on the backs of the seniors of this country, without doing anything substantive, which in the long run will make medicare more solvent. and, in fact, they've basically doubled down on the problem, because we know medicare is headed into insolvency. then they created these new entitlements. and we know the record of the government around here on the issue of entitlements -- we always underfund them. the promises are made but they're never kept. and so this will all end up rolling into a giant ball like a -- like a huge, massive asteroid headed to earth which is basically going to land on our children's heads as debt. that's what we're headed towards here we already know we have a

government we can't afford. the debt of this country is going to double in the next five years under the president's budget, it's going to triple in the next ten years under the president's budget. it's going to get to a level of unsustainability qun five to seven years. we're already seeing the warning signs. the china are telling us they may not want to buy our debt, and they're the ones who are financing us. moody's says we may have to have our ratings looked at. even warren buffett's debt today, this week for the first time, sold at a better premium than the united states debt. what does that mean? people have more confidence warren buffett will pay them back than the united states. that's a pretty serious sign when the united states is supposed to be the best creditor in the world. and yet what this bill does at its core on fiscal policy is to radically expand the size of government, and we all know it won't be paid for, and so we all know that it will significantly, probably radically expand the debt that our children are going to bear.

we are inevitably not going to pass on to our children a healthier country fiscally, we're going to pass on to our children a sicker country fiscally. and are we going to get better health care for it? i seriously doubt it. i think we're hale from dr. barrasso about how he sees this affecting -- we'll hear from dr. barrasso about how he sees this affecting our health care and others who have expertise in this area. because when you have these government programs which essentially amount to quite eye nationalization of different areas of our economy, you end up with less quality. it's unhairnt in havin un-- inhe government run thing. so the first amendment we're going to offer here today is to try to straighten out this incredible inequity that we should paying on for these new -- that we would be paying for these new entitlements, these uninsured americans and for people on medicare, with senior citizens' dollars by cutting the medicare program by over a trillion dollars when

fully implemented. and so we have an amendment which says essentially this: you cannot reduce the medicare spending if c.b.o. cannot tell us that the other expenditures in this bill are paid for with something other than medicare. it is a hard-and-fast commitment that medicare savings will go to

>> good morning everyone. today we welcome director mark sullivan to the secret service of the subcommittee to discuss the 2011 budget proposal for the secret service which proposes a 1.572 billion for the agency in

2011. this amount includes modest increases to fund inflationary stellar growth and to continue the recapitalization of the secret service outdated computer system. the request also includes 17 million for the startup costs of the 2012 presidential campaign. it's hard to believe but, indeed, that marathon is already in its formative stages and that secret service agents working on the campaign will certainly have an arduous three years ahead of them. the 2011 request also includes significant and surprising reduction in the secret service operations, and then put $6 million cut to the budget for protective operations support personnel. these personnel were initially funded through a 2009 emergency appropriation which the congress passed just half an inauguration to respond to an increased level of threats directed at president obama. since that time the threat level has waned a level consistent with past presidents which is to

say at threats against president obama mark probably likely the result of the office he holds and not personal animus against the man himself. scylla's we're all where it only takes one to derange or impassioned individualistic in a potentially dangerous situation for secret service protectees. the recent party crashing incident which fortunately did not result in violence against any of our country's leaders shows how nothing not even the assumption that and invited guests will shop for white house function can be taken for granted in this day and age. so mr. director we're interested in understanding how to increase that the secret service it said it needed less than two years ago is now not longer required for the protective mission. are you confident that not only the absolute bottom of threats but also the intensity of those threats make reasonable to decrease the budget for protective support? is it wise for the secret

service to be going into the campaign season with a lower level support personnel than you thought necessary at the end of the last election? the other issue of notes addressed in the secret service budget is the poor state of the agency's information technology systems. in a recent analysis by the national security agency, secret service at i.t. systems were found to have a reliability rate of less than 65%. this also uncovered security vulnerability is in a mainframe architecture dating from the 1980's. in last year's appropriations act we started the process of recapitalizing the secret service hardware and software with the preparation of $34 million. this year's budget 640.6 million more including 15 million for it interoperability every assistance with white house communications agency. clearly this is a project can not wait if the secret service is to provide the highest levels of protection necessary for the

2012 campaigns however i am astonished by the extent to which this problem with seemingly ignored or deferred for so long. the budget for every agency at dhs includes a per employee cost model that is supposed to find regular capital of replacements such as scheduled upgrades in computer infrastructure. mr. director, we do need to understand more about how the secret service allowed the system deficiencies to festered for so long especially in light of the other to permit wide efforts to improve dhs technology. one these issues should not overshadow the excellent work done every day by the agents and officers to work for the secret service and literally put their lives on the line to protect our nation's leaders, are a financial institutions and the integrity of our currency. we're grateful for the

dedication to serving our our country of your men and women. i also appreciate the good working relationship we have been tainted during my tenure as chairman of the subcommittee and your agencies responsiveness to various congressional concerns. is this type of collaborative relationship that our committee depends on to make the best investment decisions for our country. let me turn to my colleague in the ranking member, mr. rogers, for his opening remarks and after that you ask you to some eyes you're written testimony in a five minute oral statements and then answer the questions we have about your budget proposal. >> thank you mr. chairman. welcome mr. director for another session of this table. in you have been doing this for a good while and so we hope to gain good information from you today to read the budget for next year. the secret service, of course, is a long proud history as the nation's oldest federal

enforcement agency. which is why i have found of a discussion about the events at last november's indian state dinner rather disturbing this incident has been an unfortunate distraction from the secret service's distinguish record of safeguarding the nation's financial infrastructure and protecting our national leaders. with that being said, the incident did bring to light with the manner in which people aren't -- are cleared into the white house for richelieu and. of mr. director, i believe that no other third party or should have any role in determining access to the white house. the secretary -- secretary napalitano testified she wholeheartedly agreed with me in our recent hearing with her. today i like to hear whether the revised access protocols that you have put in place will

prevent further slip ups and sufficiently empower the secret service to perform its duties. with respect to your protection commission, i noted that it's already time for you all to begin preparing for the next election. given the unprecedented crowds that the last election and drew, and the length of time that the secret service was protecting more than two candidates, and interested in learning how you're integrating the lessons from the last election into your preparations for the upcoming one in 2012. and as always, i want to understand how you plan to strike a reasonable balance between your investigative and your protection emissions. in the upcoming elections. mr. director, we remain aware of the challenges facing secret service and i believe you are well aware of our subcommittees'

expectations. but i want to reiterate to you again as the chairman has that you have our trust and our support and we look toward the two your testimony here today. thank you. >> thank you. director, please proceed. >> good morning chairman price, ranking member rogers, and other distinguished members of the committee. it's my privilege to appear before you today to discuss the president's fiscal year 2011 budget request for the u.s. secret service i would like to begin -- the last year-and-a-half has been an active time for the u.s. secret service. especially in the areas of protective travel and securing major events. today i would note that from january 2009 from january 2010 the president has engaged in 31 international travel stops here it is significant increase when compared to the previous

administration's first year in office. and during the same time the vice president engage in 21 international travel stops compared to one international d'allesandro the previous vice president first year in office. in addition to the increase international travel for the president and vice president the u.s. secret service was responsible for the national special security event since 2009. the most ever designated in a single year. this included the g20 held in pittsburgh, pennsylvania which was attended by the president's in a total of 37 heads of state and government on with their spouses. concurrent to the g20 in pittsburgh in secret service protected 100 and nine hits the states and governments and 60 spouses for the 64th u.n. general assembly. in 40 percent increase over the previous year ..

the international association of the chief of police in the international association of financial crimes investigators recognized us for another significant investigation which

was the largest and most complex case of its type in the u.s. history breyer to the heartland payment system case. the president's fy 11 budget for the u.s. secret service totals $1.57 billion focuses on four primary areas. funding to provide the necessary training and equipment but would be needed in the advance of the 2012 presidential campaign finding to enhance production of the white house complex and other protected sites finding to sustain critical investigative operations and protective intelligence cybercrime strict that our nation's banking and financial institutions and counterfeit suppression. in funding to address i.t. and communications deficiencies the directly support the project is an investigative mission. i will highlight a few of these initiatives this morning.

although the 2008 presidential campaign and transition activities and it just last year, we are already beginning the necessary planning and advanced work for the 2012 campaign. the preparation is critical because of the time that is required to provide advanced predictive training to our employees and dhs partner agencies participating in the campaign security activities. in@@@@@@@ @ @ @ @ $÷

these issues is currently pending before congress, the president's budget request provides the secret service with the resources needed to meet these ongoing recruitment and retention challenges. it's important to protect and investigative mission, u.s. secret service must marginalize the i.t. and infrastructure system. the secret service has been working with the department for several years to address immediate infrastructure concerns while providing a long-term plan to replace the legacy named i.t. system with a

modern, read based environment that can meet the demand of today's mission requirements. an example of the need for this modernization effort is the white house communications agency interoperable the project. between 2003 and 2008, the investments to the communication system created an interoperability gap with the u.s. secret service. thanks to the founding of this committee provided in the fy 2009 omnibus appropriations act, the u.s. secret service is one step closer to achieving interoperable the end for communications. despite the demands of our mission the men and women of the u.s. secret service remain vigilant and prepared for the challenges that lie ahead. at this moment, we and our partners are engaged in security planning for the nuclear security summit in washington, d.c. next month which was the six made it a national special

security event by secretary napolitano on february 6, 2010. we expect domestic and international travel stops to continue at a heightened pace consistent with what we saw during the past year. further, as the complexity of cyber and other crimes detected at the nation's banking and financial directed at the nation's banking and financial institution grows the u.s. secret service will continue to foster relationships with our local, state, federal and international law enforcement partners through our network of electronic crime task forces and financial crime task force's. mr. chairman, distinguished members of the committee, this concludes my winning statement. i will be happy to answer any questions you may have. >> thank you, mr. director. let me move directly to your budget request for $14 million of new funding for the startup costs of the 2012 presidential campaign. this is significantly more than

the 8.1 million startup costs for the 03 campaign or the 04 campaign, which was the last time a sitting president ran for reelection. even after adjusting for eight years of inflation this represents a 41% increase in costs. why has the first year of planning cost to prepare for the 2012 campaign grown so much more than the rate of inflation since we last had this circumstance? is the secret service planning a more robust effort for the presidential campaign than in the past? or are there other circumstances that account for this? we assume the projection correlates roughly to the work load so why would secret service request such a large increase for the presidential campaign that the same time be reducing its budget for the regular protective mission? how does this balance out? >> thank you. as you mentioned the budget for

the 2004 campaign was $8 million i believe the budget for the 2008 campaign was about 19 million for the first year and for this campaign it's 14 million. when we look at the cost associated with the 2012 campaign compared to the 2004 campaign there's a couple of areas where there's been significant increase, and again i'm not sure what we are using to compare inflation with back to 2004 with the cost we see this increase is the cost of vehicles for the campaign the vehicles we get are a very important part of our protective methodology, and we have to buy these vehicles this coming year these vehicles need to be armored, the need to have ballistic glass in stalled. the need to be equipped with radios and other types of equipment for the campaign and the need to be repositioned around the country but the cost of these vehicles compared to

2004 has increased about twice the cost they were back in 2004. additionally, we have to buy radios and other types of technical equipment. again, we look at the cost compared to 2004. this cost is increased about twice as much as well. and i will tell you that one area that we have found deficiencies in training. i believe we are about $1.5 million under where we were in 2004 for training. back during 2004, we used to our training -- we would have all of our people come to their rallies trading center to the training and that would involve the travel costs, that would involve per diem, that would involve the launching cost of all these people coming to to mention taking them out of the district for a long period of time. we found in the 2008 campaign that it was more cost-effective and from the mission prospective bidder to have our people

trained in the field so now we have the trainers go to the people in the field so we did realize a cost savings by conducting the type of training but again i would say the two areas we really have seen an increase would be the cost of the vehicles and equipment for the vehicles as well as the radios and the other type of technology. >> to turn to the manpower and womanpower question, the ft questions and this request dovetails with projections for the regular mission let me see if we can't shed a little further light on that. i mentioned in my opening statement we understand the number of threats made against the president have dropped however during the 2008 presidential campaign, the intensity of threats against than candidate obama lit to the assignment of the secret service

earlier than any other candidate in history and of course we are all aware it takes only one particularly obsessed individual to present a real threat. there's been a rise of a lone gunman style attacks at fort hood, irs offices in austin, the pentagon so we do need to realize it is not only the number of threats but the fervor they are conveyed that indicates the level of risk the leaders face. so to the extent you can express this in open session, can you tell us if the threats against the president or any other protect these include the hallmark of any particular intensity the secret service hasn't seen before, have you seen changing the intensity against the president since the inauguration, and then a few could help us understand how the changes in volume or intensity of threats translate into secret service manpower and personnel

requirements, do more threats require additional field investigations, does the secret service increased the forces directly with the agency that serves aggressive threats? and then the underlying question, how at the same time that you are asking for these increases anticipating the 2012 campaign, how does that dovetail with the decreases, manpower decreases in particular that you're looking at for the regular protective measure? >> chairman, you've brought up great points and i will try to answer all of them, if i leave any doubt, be sure to remind me which ones left out. as far as the threats go there something we pay a lot of attention to. as you know we have one program area that is just dedicated to protect intelligence and i believe that we are very aggressive with it working with all of our partners of their that provide us the best information that they have.

we are a big consumer of information and that is a big part of our high protective methodology based upon that information we received. however, we also know that, if you know, we can't just rely on the bond information. there's a lot of fun known information there, so for that reason i don't believe there is an employee on our job who doesn't wake up in the morning or go to bed at night and not thinking that there is someone out there looking to harm anyone of the individuals we protect every day so the threat information is important to how we do our mission but we still know that every day there is somebody out there looking to harm those people that we protect and/or write it could be a gunman or orie and organized group and we have to look at every single one of those possibilities. as far as the threat level as i talked about before during the

campaign, during the presidential campaign the threat level raw raised at the time of the election. i would say that was the highest it had been prior to that and since that as we approach the inauguration we saw those numbers began to decline in over the past year a little over a year i would say the threat level against or the number of threats that we are seeing against this president or at the same level they were for the last two administrations at this point in their administration, and it pretty much goes back to i believe what you said during the opening statement that it's more about the office than anything, these threats that we are seeing. now going back to the hiring, you know, back to years ago we made the case because of the heightened threats that we needed to bring more people on

into organization, into the agent ranks and administrative professional and technical ranks and thanks to you and you, mr. rogers, we were able to get in the 100 million-dollar omnibus. we got the opportunity to hire 150 agents in i believe it was 204 administrative professional and technical. and these people were in permanent protection deals. the priority for them was to go to the permanent protection assignments and go into the field and do is the author protective duties we need to be done now in our network of field offices. ultimately the out your funding for that was cut by about $9.5 million we had to take a hard look at our hiring goals and we had to make sure one thing all of us wanted to make sure, one thing i wanted to make sure of is what ever people we

did bring on that we would be able to bring them on and a quip them and have the necessary funding and the out years to make sure that these were high years we could maintain. with this loss of mind with $5 million we had to modify the hiring goals and we reduced it to 125 agents to be brought on, and i believe it was 146 or so administrative professional and technical probably about 138, somewhere around there. so far this year we have hired all 125 of the agents. i will tell you that every one of those agents has started in a field office. those people are backed the plan more seasoned agents who have now been transferred to a permanent protective detail so i can assure you those priorities when it comes to our permanent protection have been addressed

by the 125 that we have hired and again they were back filled by these new hires. we have hired 75 of the administrative professional technical positions, the priority positions we needed to fill for fy 09 and now during fy tannin we are looking to hire about another 40 or so of the administrative professional and technical so we get exactly what we are looking for in the original omnibus. we did not however have we been able to prioritize and put those people out of best use where they need to be and does that make us whole and get us where we are looking to be? i believe at this point and looking at the constrained budget environment we are operating and i believe that we have been able to make this work and i believe as i told you before protecting the president

is the number one priority and we are not going to compromise on that and i believe we have the assets in place to do that. >> thank you. mr. rogers? >> well, in the 08 election, the secretary spend a little over 5 million beyond the amount they r

anticipated and also at the end of the campaign or the end of the inauguration we had a total of four or five nfsc around the obligation and we did have to go back and look for reprogramming. but we did learn or what it did reaffirm is these campaigns are very unpredictable. and the crowd size is that we did see did dr. how we had to conduct the preparation. we put nearly 5 million people

through metal detectors which is at least two times the amount we put in during the 2004 campaign. so, we do want to make sure this campaign coming up that i do not believe there will be as many candidates, but then again that remains to be seen. this last campaign was the first time in 50 years we did not have an incumbent running for office, so we had candidates on both come from both political parties >> welcome as you say, you are unlikely to have the number of candidates and 12 as we had a net 08, and as we all know that remains to be seen at this point. but you do anticipate fewer protectees in the campaign?

and 012? than in 08? >> that is what we are expecting. yes, sir. >> let me quickly jump tracks to the white house access dial mentioned in my opening remarks. it seems to me that we do not have clearer lines of responsibility about checking or clearing who gets into the white house. i hope i'm mistaken on that, and you can correct me if i am. but the state department has a hand in it. the white house social secretary is staff has a hand in it. obviously the secret service and perhaps others, but these people who crashed the party so to speak a while back the indian state dinner raised this issue and i think they did as a favor quite frankly because i think we need to clarify this and perhaps

it's been done or already has been in affect. what can you tell us? shouldn't the secret service be the person, agency that clears people into the white house grounds? >> you know, congressman, i see it as a partnership and it's a very critical partnership. and just to give you a little bit of background of a procedure what will happen if there is an event at the white house, these people are invited by the white house to come to the white house. and they will give a list of people who have been invited and accept that we will do name checks on these individuals so again it's a very important part of the partnership. from that invitation list is generated and in the system we have in place is that we and the white house staff will work together as partners at each checkpoint to ensure those individuals who have been

invited do get and if somebody isn't on that list again that is working with white house staff we will determine if in fact they should be on the list. if they should be on the left and they haven't been named checked we will name check them and then those people will be allowed to enter the white house. as far as the state department, we have a very healthy and longstanding relationship with the state department, i'm sorry, with the state department. we have a longstanding partnership with them on this particular night. we did not have the list. we have since modified that so that we and the state department are working off the same list and we are checking that list together. and this was at an area that was a remote location from the white house. but again, it's my opinion that the best way for this to work is for us to do it as a partnership both of us being there to get

there, both of us with the list and checking the list of together. >> the state department is not in charge of protecting the white house from on the unlawful intrusions' nor is the social secretary. they may be involved in making the invitation list of who should be inside and see that they are inflated but when it comes to gaining entry in the white house grounds, i firmly believe it is the secret service, period; and i ron on that? >> first, somebody getting into the white house that shouldn't be in the white house that is our priority, that is our job to do that. however, as far as the list, as far as checking that list to make sure that people that need to get an are getting in, i do believe that it does have to be a partnership with trippi with the white house staff or the state department just to ensure

that those white people are getting in. >> how do these people get and? past the checkpoint? they were not on the list, write? >> they were not on the list. as it from the beginning, congressman, this was a mistake in judgment. this was an error. they should not have been allowed to go by the initial checkpoint. we had particles and policies in place for that evening, that if anybody showed up at the gate and their name was not on the list that we were to call for assistance to help verify whether or not those individuals should be able -- >> what happened when they showed up and they were not on the list? what happened? >> they were allowed to proceed through the gate. >> by whom? >> by us. >> how come? >> as a told you, sir, it was a mistake. >> has anybody been reprimanded for that? >> currently we have put those people on administrative leave. we are in the middle of a

criminal investigation. so, at this point, sir, i would rather not go into anything deeper than that as far as where we are with the administrative action. >> well i know just from a personal reference, mr. chairman, members of congress are invited to the white house for a christmas party. obviously a large number of members, 435 house members and 100 senators and staff and cabinet members and the like, quite a crowd of people, but i noticed in going through the process of getting an, we were met on the street outside of the white house by some young staffers with a list in there and that they would check you off and you would go four or five steps and another young person, who represented to i don't know and they had another list, they would take you off and he got checked off four or five times by staffers for whom

i don't know and finally you get to the gate and people i assume secret service people than to check you off the official list. but who are these other people that check to off five or six times? are the assigned to social secretary or who? >> again i believe working with our partners of the white house but the white house staff and our people working together. we do not want anyone to get in the white house should not get into the white house, and we have looked at -- we put 100,000 people through the white house every month, 100,000 people go through the white house every month, thousands of pass holders are at the white house that we expedite through. i believe our men and women do a terrific job and what happened back in november none of us want to see that happen again. and again, that is why i go back

to the partnership with the white house or the state department. we believe it is very important to work as a partnership and make sure the people invited to get in and the people that are not invited don't get in and of the people that you are referring to, and i'm not sure a number of times, but those are the white house staff people and our people working together to ensure the right people are getting into the white house. >> i have to tell you, going to the christmas party it was a confusing process and helter-skelter. it was not what it has been in the past -- is probably beyond the secret service committee to solve, but it's not a clean and clear check with all of those of the people there. and i don't blame you for them but the process needs to be cleaned up. >> the process going back to november we've taken a hard look and we have worked very hard

with that and again with all due respect, i believe that being so close to the incident back in november i think everybody was trying to do the best job they can to make sure we did get the right people in and again to make sure the wrong people didn't get in. >> let me just put it this way. i feel completely checked. [laughter] >> that's good to know, sir. [laughter] >> i think we all felt completely checked at the christmas party and i also think we understood as some level that this was a reaction to the early incident and perhaps did not assume the multiple layers, as the ranking member said, is somewhat apparently redundant list checking going on, i didn't assume that was necessarily the permanent state of affairs. >> by the time i got through the

checkpoints, the lines of checkout i was too tired to go to the party. [laughter] >> mr. ruppersberger. >> of want to say i think your organization does a great job. you have well-trained men and women. you remind me of the offensive line on the football team. q. what is when something goes wrong and when things don't go wrong that's when you are doing your job. i want to get into the issue of the overtime pay. you mentioned you have a lot more resources and man hours especially the last election with the type of campaign that it was and also it gives a lot of overtime and a lot of people because of certain federal cap logs can't be paid for for some of their overtime. i know that in some areas there is air traffic controllers and a waiver on overtime i've think anybody in the department of defense and theater over time.

have you looked into this? where are you as it relates to that issue of a waiver for overtime and unusual circumstances for toward men and women? >> right now i have the ability to go to the secretary for anyone that is going to go over the overtime capped i have the ability to go to the overtime and ask for a waiver. >> have you received those waivers? >> we have not had to do that. this is the first year i believe we have the cap as going to be i start in thinking to 12 -- 2010. >> even with all of the overtime and man negative hours that you used in the last election? >> [inaudible] >> my understanding was you have an issue. i know you're not part of the intelligence community that you are in financial crimes and issues such as that. do you work seamlessly with the intelligence community both

military and st. intelligence? >> yes, congressman they are one of our best partners. we are a consumer of intelligence and information, and i can tell you all of our partners in the intelligence community could not be more forthcoming and we have a great relationship. >> i think intelligence is one of the main issues you deal with every day to do your job. >> as a matter of fact just reminding you we are very active in the jttf and the fbi jttf and those are critical to our operations. sprick the last thing, the retirement issue. for no fault of their own about 200 secret service agents put in the wrong retirement system 20 years ago and they've lost thousands of dollars of retirement which they should be entitled to because everyone else in the agency has dealt with that. senator lieberman and donner are trying to work on this issue to see how it can be resolved. do you know in a fig about that

at this point? can you discuss it and do you have any recommendations or suggestions? >> sure. first of all i am very grateful to you for your support. these are agents who came on the job in 1984, 1985 and 1986 who have since risen into the senior leadership positions of our organization. as it's been@@@@ service so any

help you could provide with that we would appreciate. >> thank you. >> let me return to the question of information technology. another major item in your budget, the budget requests $48.6 million for information technology investments. recent reports have highlighted house and secret service system such as the primary mainframe on which critical applications ron date from the 1980's. however, the secret service

budget like all budgets at the dhs require certain employee cost allowances for overhead and capital expenses. it does raise the question why the secret service has allowed its i.t. infrastructure to become so outdated particularly when it year after year i think without exception have granted the full budget request for secret service and that request is supposed to cover the cost of regular system recapitalization. it's supposed to be built into the budget. and then of course the question that this year's proposal raises, what kind of program are you putting in place to ensure the base secret service budgets are allowed with the information technology investments you simply must make now and in the future?

>> chairman, one of the priorities after i became the character is the i.t. infrastructure, and i had asked i guess going back to 2007i asked for -- or late 2006 -- i asked for a top to bottom, bottom to top review of the ip infrastructure and wanted the report of what the status the i.t. infrastructure was. and at the report i got back if you were looking for the 1980 state of the art infrastructure compatible with the treasury department we were your guys. the bottom line was that we were, you know, we confirmed what you just said that we had an i.t. infrastructure that was degrading and that was in need of repair. so why requested that we do and as ase, and let me give a full briefing and i also asked that we have an outside entity, it in and do a review and ultimately that was the nsa who did a blue team and as you had mentioned

earlier we found we had about 60% -- 68% reliability and our i.t. people were having to come up with work around us to get the i.t. infrastructure to just maintain. it was that point we began working with you and i would like to thank you, mr. truman and mr. rogers for your help because you have been extremely helpful at this and because of your help i believe we are on our way to fixing the i.t. infrastructure. we worked with the department and the dhs cio. negative we have a very good plan, a five-year plan to get the i.t. infrastructure up to where it needs to be. currently right now we are stabilizing the i.t. infrastructure and we have addressed many of the efficiencies there were pointed out by the nsa report and now we

are analyzing and working with the department and the cio to make sure this is the best and the most effective investment that we can and to make sure that ten or 15 years from now we don't find ourselves in the same position. this is something that is going to require maintenance. it is something that is going to continue to maintain attention. we have a good plan and i think the trick here is going to be for us to maintain the plan and continue to keep the department as you advised of the direction going. >> i appreciate your commitment to the plan going forward, and perhaps should underscore would you just said about sticking to the plan, and the question i am raising has to do with whether you may need some help in doing that from the way your budget is

framed because there has been serious lack of investment and i.t. infrastructure despite a budget process that is supposed to guarantee that there is money available for this kind of work right along without it being specifically designated in a single line item. as you know your information technology budget is included within a broad account within the broad salaries and expenses account ability to use the funds for other activities as competing priorities might emerge. so my assumption is that past history demonstrates taking advantage of this flexibility perhaps what seems to be good reason but given the poor condition of the information technology infrastructure leads

one to question whether me that flexibility over time has served well. how can we make sure the funds appropriated last year and requested for 2011 will be redirected to other priorities? >> there's not many priorities that are important in this i.t. infrastructure and i can tell you i am committed to it and the senior staff and all of our employees are committed. the people we of working on this project are committed. this is a really important initiative within our organization. what happened going back ten or 15 years ago quite frankly i can't address all i can address is moving forward and make my commitment to you we are going to make sure we keep you informed of the direction we are going and make short we continue to work the department and i can tell you we have got 100% support and backing from the department. we have made a presentation to them. they have signed off on it.

there is a report that went from the cio up to your committee. i think it spells out what the plan and is and what our commitment is and i would be more than happy to continue to come up here and provide you with progress of where we are and have our i.t. people come up here and talk to your staff about where we are but i really do appreciate your support. >> we appreciate the commitment, and we will follow your progress closely. finally let me just ask if there is perhaps more problems where this one came from so to speak or direct knowledge the secret service has been unable to keep its information technology up to date are there other analogous problems for example with of the vehicle fleet with weapons systems? what is the replacement cycle for the secret service vehicles

and sidearms and can we be assured that we are on top of the game? >> yes, sir. both vehicles it is something very important to the mission. we pay attention to that both vehicles we put our protectees and the vehicles we put our employees in. i believe that this committee has been very fair as far as the funding for these vehicles and i can assure you we are fine with vehicles as far as weapons we are continually looking at the types of weapons that our people carry. right now we have to separate evaluations of going regarding shoulder weapons that people use. as a matter of fact i just had a meeting last week with several of our people that i would refer to as experts on the field of weapons and i can assure you we want to make sure that our people are the best equipped. as i said our people and our mission are priorities and i

want to make sure people are able to carry out the mission. when we look at the efficiencies within our organization and ways to cut back on overtime we look for those discretionary areas. however, when we look at making those efficiencies we are at it won't come at the expense of the mission and we don't look to compromise when it comes to buying equipment or when it looks at baiji and vehicles. we don't compromise when it comes to anything that is quite directly support the operational mission. >> thank you. mr. rogers? >> of course protection is one of the big nations of the secret service but there is another big aspect of what you do and that is financial crimes investigations. after all this is the largest law enforcement agency in the

government and the treasury department to look out for counterfeiting and financial crimes and i don't want us to forget big heavy responsibility then you have in that respect especially in these troubled economic times where the temptations people to engage in a huge financial crimes the temptations are greater now than perhaps ever. i notice in the last year you uncovered a very large financial crime operation. can you describe what i'm talking about? are you familiar with what i'm talking about? >> yes, sir. there was a couple of them. there were two identity theft cases that we worked both of them at the time with the biggest antitheft case in the

history of this country. these were data intrusions' or individuals able to get into financial systems and able to extract identities and credit card account numbers. the one you are referring to is the heartland payment systems, 130 credit card account numbers were compromised with potential of billions of dollars in fraud. this was a transnational investigation. i believe it included two russians and one american involved in this particular case but it does go to show that these are borderless crimes, transnational and that's why your support on our foreign office initiative is so important because these are not investigations the largest local international and scope but i will tell you that these cases are because of the support shown for electronic crime and

financial task forces. we've 29 electronic task forces, 28 domestically. we just open the first one in a row and we have 38 financial crime task force's and it's through this partnership we have about 2,000 state and local federal law enforcement partners. we have about 300 partners for edemea and business and financial partners and we are able to take a vantage of this partnership because of the persian and because of our terrific men and women able to work investigations like the one we are talking about right now. >> there was another one -- >> there was another one before that, the tjx investigation that involved nine defendant's again transnational. that 1i believe involved about 40 million identities and a credit card account numbers that were compromised.

again this was a transnational investigation. many of these individuals in eastern europe. i guess it's because of the support we get from this committee with electronic crime task forces that these came to fruition but this was a terrific investigation as a matter of fact one of the defendants i believe we found a million dollars buried in the backyard and because of these types of investigations but we have seen is our numbers are up by about 8% from the last year and the forfeiture is up by about 35% so i do believe -- also because what people are doing we are able to prevent further fraud. >> that scheme i am told involved 11 individuals from four different countries who acted to the networks of nigh and major retailers and obtained more than 40 million credit card

numbers and a debit card numbers; is that accurate? >> yes, sir. >> can you tell us the dollar amount of the crime that was involved? >> if you took those 40,000 account numbers and put a minimum $500 -- >> 40@@@@@@@ d banks and other

financial the institutions? >> ibm. on this particular case with these defendants did the way they were able to hack and it is called board trading. the driver abandoned their vehicles and using a laptop they had been too vulnerable systems that these companies had and it is very, very -- it is very advanced and that is again why the electronic crimes special agent is so important. we have about 1200 agents better trained in electronic crimes with protest to do with basic or intrusion or forensic capabilities but these are very smart and talented people and people have to be more talented and better equipped.

sprick the economic times are a factor to the increase? >> i believe they are. yes, sir. >> why are you proposing to cut $4 million? the domestic field operations component of the investigations mission. >> again, sir, i go back to the constrained economic environment that we are in but first of all let me just tell you that cut will not involve of scouting in the field office and will not involve los to discuss cutting in a program that we have and will not involved in the of our people come to the people out in the field they shouldn't notice this at all. what we have done and we've done this across-the-board with this free program very we've asked people to take a hard look at all of our discretionary spending. the areas we are looking at here would be for contractual services. it would be -- to look at the

high number of vehicles we are going to purchase as i mentioned earlier we take a hard look at the vehicles. we thought we had a healthy vehicle fleet. we are going to take a look at disciplines and looked at every discretionary pot of money but it's not going to affect our operational entities and equities. >> i think i defer with you on that but more importantly, i've been told the leadership of the department, not new but above your head is reviewing the possibility of severely cutting back the investigative mission next year in a 012 with the aim of a law on certain aspects to

continue on. i'm told the counterfeit and identity theft work might from your perspective donner a pivotal to this 4 million-dollar cut this year as a possible ohlman of bad things to come in the future. can you straighten me out? >> i can tell you from the conversations i've had with the secretary and the deputy secretary they fully support our investigative agenda and that i do not anticipate any cuts like that. i believe was see in identity theft and investigations i anticipate them to move forward in the direction they're going now as a matter of fact the department is involved in a bottom-up review. we have had some very healthy conversations regarding our investigative mission and from those conversations i've had with the department regarding

the investigative mission i find them to the full support of it. >> well, all i will try to make sure that you are supported in that. i find it hard to believe that parsing of aspects of the investigation ruled that you have especially in these economic times we are in and with the increase in financial crimes globally and especially here, i don't want to see us d greeting your agents capabilities and skills and quantity to thwart the financial crimes even more complicated as we go along. so i would like for you to keep us abreast of any thoughts about cutting the investigative operation. >> iowa appreciate that.

one of the things you and i talked about is the ratio and during the campaign we are able to people in the field -- >> between investigations and protection? >> yes, sir. for the campaign we are at 5050 during the campaign year and this past year we are about 57% investigation and about 43 per cent protection which as you know is an increase so please let me assure you that it's a really important component of what we do. i think the duet with the of the mission makes us the organization we are. i believe we are better protection because what we learn as investigators and i believe we go back to investigations we are better at that because we were in protection so i think we are the organization we are because of that duality mission and something we are committed to maintaining and i will tell you that from my conversations to reinforce with the department is my belief i have 100% support as well. >> i'm glad to hear that. well, the protection aspect of what you do as the most visible

and glamorous attracts the most attention. but the investigations work that you are charged with doing is terribly important to the economic well-being of the country and the world. thank you. >> thank you. appreciate it. >> in the same day and let me ask a final question about another aspect of your investigations work namely anticounterfeiting work. as the ranking member says, the protective work is better known. most americans probably have no idea that the function was on counterfeit currency. from the very first days of the agency. you have leverage in recent years relatively small investment in overseas operations to significantly reduce the protection

particularly in colombia and i want to focus on the south american connection here for a minute. previously the criminals operating in that country made it the number one producer of counterfeit. columbia out ranks third still not great but certainly better. unfortunately, a number of those counterfeiters have simply relocated some of to peru which is the dubious distinction now of being the four most source of u.s. currency production. so i would appreciate an update on what the secret service is doing to address the counterfeit currency being produced in peru. have you been able to leverage good relationship with the colombian government or replicate that kind of relationship in dealing with peru? have you considered establishing a permanent field office elsewhere in peru and has the

dhs or the state department offered any resistance to the notion of expanding the secret service operations in peru or elsewhere in south america? >> thank you. colombia i think it's a great story and give it goes back to the support we have received from this committee. i do think it shows when we put our people and put boots on the ground working with the foreign partners how much we can achieve and we have developed last several years a terrific working relationship with the colombians and we have made great strides. we made big seizures. when he looked up the types of counterfeiting into jet or computerized generated type of printing. we don't see it domestically of the offset but for and we see an awful lot of that and the

majority comes from colombia, and because of the great work of the people down there we have been able to arrest one of people and make seizures down there. i didn't know they had gone from first to third and now peru is claiming and i guess we could get ourselves in trouble because we are forcing people out of columbia and moving to a south american country but i think we have another success story going in peru. we have project peru. people went down there and early last summer. and that so far has yielded about 31 or 42 arrests and about $20 million seizures. so again it shows when our people are on the ground working with foreign partners it does work to everybody's advantage. as far as establishing a field office in peru for any foreign office initiative we want to be very strategic. we want to do all of our home

work. we normally tdy people first to see with the potentially is and what benefit we are going to get out of it. i can tell you we have not made a determination yet on peru. i will tell you if we do make one, your committee will be one of the first ones we talked to we will discuss this with the department as well and the department currently is conducting a complete review of their foreign office allocation and their strategy. we are working with them and i provided them with our foreign office status but if we do believe that perot or any other location is the best place to have an office we will do the appropriate background information. we will present it to you in a written form along with the department into the state

department. .. i am not exactly sure.

>> i am not trying to trick you. [laughter] >> it doesn't take much. >> we can take a closer look. [laughter] >> we have gone to great lengths have we not in redesigning most of our paper money in recent years. >> as a matter fact i think we are going to be in a link the new 100 next month or so. >> since you, since we have the new money that has all sorts of new imprints and paper and secret things and so on, have you noticed that counterfeiting has gone down or up, after that took place? >> again, i see if is a mentioned earlier domestically i do see the offset counterfeiting significantly down. we continue to see with the qualities of these inkjet printers, as with all the investigations we see, this computerized equipment does make counterfeiting a lot easier for

people. counterfeit goes up and down. it does ebb and flow. i do think the countermeasures are working. i can't give you a definitive percentage of where it has gone. >> well, is it worth redesigning the money? >> i think it does. when you look at it i think there are $883 billion in genuine currency out there. the percentage of that honey that is counterfeit is like a fraction of 1%, like 2001%. again, go back to prevention. i think anything that we can do to discourage or prevent people from counterfeiting or any measure we can take i think is the benefits so i do think the redesign of the counterfeit was a benefit and i do think it does show with the offset printing, i think it does show that that

really has decreased. >> mr. chairman chairman i will conclude just by thanking the director and all of the folks under your command out there, who risk their lives every minute of the day protect thing our government officials, and rooting out financial crime and all of the things that the secret service does. so, we owe you a debt and all the folks that you represent and we thank you for your service. >> thank you congressman. >> we do thank you for your appearance here today and for the good work you and the men and women under your do. we are going to need to confer with you in the weeks ahead as we assemble our appropriations bill and we look forward to that continued collaboration. >> thank you 3exvo